Despite promises from Finance Minister Chrystia Freeland not to put any more money into the troubled Trans Mountain pipeline expansion, government records show she did just that..Sort of..Information on the Canada Development Investment Corporation website showed the Feds — through Export Development Canada — put up $3 billion in loan guarantees that allowed TMX to obtain an additional $11 billion in private financing after costs soared more than 70%, including a 44% hit in March..The deals were apparently made through EDC in two separate tranches to increase bank lines under the Canada Account in April and May of this year. Which is to say, it doesn’t represent any new money and will be repaid when they mature in 2025, after it comes into service..That's is expected to happen by the end of this year, facilitating some 890,000 barrels per day of exports to tidewater starting in the first quarter of 2024. That in turn should alleviate price pressure on Alberta barrels and narrow price discounts in the US Gulf Coast..But it’s been an agonizing wait to get it across the finish line. After it was first proposed a decade ago, the federal government stepped in with $4.5 billion to buy the project after repeated regulatory delays and cost hurdles threatened its cancellation..Costs have since ballooned to more than $30 billion after floods in BC last spring and unexpected archeological discoveries delayed construction further..According to its web site, construction is now more than 82% complete with 95% of facilities completed, according to Trans Mountain’s first quarter update on May 30..Despite concerns from the Parliamentary Budget Office that the pipeline would be a “net loss” for taxpayers, CDIC received an assessment letter from BMO Capital Markets and TD Securities on March 10 stating it's still commercially viable..“The expected future cash flows generated by (Trans Mountain Corporation), upon completion of (Trans Mountain Expansion), are of a quality and size sufficient to support an investment grade credit rating of the company assuming an appropriate capital structure. An investment grade credit rating would enable the company to access debt financing in the private markets without reliance on government support.”
Despite promises from Finance Minister Chrystia Freeland not to put any more money into the troubled Trans Mountain pipeline expansion, government records show she did just that..Sort of..Information on the Canada Development Investment Corporation website showed the Feds — through Export Development Canada — put up $3 billion in loan guarantees that allowed TMX to obtain an additional $11 billion in private financing after costs soared more than 70%, including a 44% hit in March..The deals were apparently made through EDC in two separate tranches to increase bank lines under the Canada Account in April and May of this year. Which is to say, it doesn’t represent any new money and will be repaid when they mature in 2025, after it comes into service..That's is expected to happen by the end of this year, facilitating some 890,000 barrels per day of exports to tidewater starting in the first quarter of 2024. That in turn should alleviate price pressure on Alberta barrels and narrow price discounts in the US Gulf Coast..But it’s been an agonizing wait to get it across the finish line. After it was first proposed a decade ago, the federal government stepped in with $4.5 billion to buy the project after repeated regulatory delays and cost hurdles threatened its cancellation..Costs have since ballooned to more than $30 billion after floods in BC last spring and unexpected archeological discoveries delayed construction further..According to its web site, construction is now more than 82% complete with 95% of facilities completed, according to Trans Mountain’s first quarter update on May 30..Despite concerns from the Parliamentary Budget Office that the pipeline would be a “net loss” for taxpayers, CDIC received an assessment letter from BMO Capital Markets and TD Securities on March 10 stating it's still commercially viable..“The expected future cash flows generated by (Trans Mountain Corporation), upon completion of (Trans Mountain Expansion), are of a quality and size sufficient to support an investment grade credit rating of the company assuming an appropriate capital structure. An investment grade credit rating would enable the company to access debt financing in the private markets without reliance on government support.”
